CIO QuickPulse * IT and Business

IT and Business: From Alignment to OptimizationIt is a far more collaborative world between business and IT than it once was, which opens up to CIOs the opportunity—and the challenge—to move toward optimizing IT and business operations.

Achieving business and IT alignment has been

the top priority on CIOs’ agendas for years.

But the more forward-thinking IT leaders—those

who have been relentless about showing how

information technology is a core part of the

business model—are ready to push forward

the innovation agenda and enable even better

enterprise performance.

The question of how to build success atop

what now is a solid foundation of alignment

is foremost in their thoughts. They’re especially

focused on the challenges of doing so in an

era increasingly defined by the need for

innovation without disruption, whether that’s

employees wanting to use their own mobile

devices at work or the growth of Big Data,

which leaves companies awash in information

before they’ve become masters at exploiting it.

The imperative for CIOs, then, is about opti-

mizing IT and business operations, and they’re

determined to do so even if it means moving be-

yond their traditional comfort zones. To that end,

they are plotting how to accommodate new in-

dustry trends that impact IT in ways that promote

the greatest business agility and advantages.

Alignment: The Foundation for OptimizationEvidence that it is a far more collaborative world

between business and IT comes from a new IDG

Research Services survey: It finds that nearly 90

percent define their relationship with business as

being very much or somewhat collaborative.

At least part of the reason for this must be at-

tributed to the fact that IT leaders have embraced

keeping IT and business priorities in sync. The

survey shows that for 60 percent of respondents,

this is the key to having business peers equally

invested in optimizing the IT operations that sup-

port their most-cherished endeavors.

Meanwhile, 40 percent of IT leaders are taking

processes off-premise—not just to the cloud, but

also to the mobile devices that increasingly serve

as business users’ primary tools. Extending key

business processes to mobile devices—assum-

ing IT accounts for security, performance and

the like—can make it easier to do business with

customers and partners. In fact, mobile-enabled

applications and virtualization count for two of IT’s

three top spending priorities for optimization.

Optimization: From the Ground Floor UpThe trio of top spending priorities also includes

enabling collaboration, extending from internal

employees through to customers, partners and

suppliers. Forty-seven percent of respondents

cite this, just a hair’s breadth ahead of the 45

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percent that claim a focus on mobile-enabled

applications and virtualization. Nipping at these

responses’ heels is a goal to harness data with

analytics, considered a priority for 40 percent of

all respondents.

Interestingly, one of the things that distin-

guishes the one-third of respondents who say

they are very effective at quickly adapting to

shifting business priorities is that they tend to be

more collaborative enterprises compared with

other organizations. And the 45 percent who

consider that their enterprise has a very col-

laborative relationship between IT and business

management are more apt than their peers to be

investing in harnessing data with analytics.

Measuring Success: Change in the AirThe optimized enterprise can—and still does—

measure the impact of its efforts by how much

costs are reduced. Nearly 80 percent of respon-

dents see that as the primary success metric

for judging efforts to optimize IT and business.

Even those IT leaders who give themselves

high marks for effectiveness in accommodating

changes in business priorities count this as their

top success metric.

However, they also are more likely than less

effective organizations to rely on “gains in em-

ployee productivity” as a measure of success.

Only about half of the respondents now judge

success by such factors. But it’s hard to imagine

that this won’t change, given the clear impact

that the intelligent adoption of IT’s leading priori-

ties can have on achieving those ends.

Optimization: A Continuing Opportunity for LearningAccording to the overwhelming majority of survey

respondents (70 percent), the focus on IT and

business optimization is expected to increase.

For another 17 percent, it will remain dynamic, so

get ready for the outlook at those organizations

to veer from soft focus to sharp levels of intensi-

ty. This fits in with the evolution of CIOs’ role from

functional to strategic, which was revealed in the

2012 “State of the CIO Survey” by CIO magazine.

It’s clear that the optimized enterprise cannot

exist within a traditional context of IT, or of the

expected financial models for governing the

balance between IT operational costs and invest-

ments in projects to support the business. In an

age when there is less focus on the specifics of

cost containment—and more focus simply on

getting the cost-cutting job done, period—just

about one-fifth of respondents currently see

shifting CAPEX to OPEX or the ratio of IT OPEX

to investments in new initiatives as measures of

optimized IT-business success.

Within the organizations that are focused on

optimization, IT leaders are well positioned to

exploit trends already under way. So, instead

of homing in on micromanaging costs, they

are optimizing their ability to respond to the

demands that accompany trends, such as IT

consumerization and Big Data, to business

advantage—including the next wave of intersec-

tions with mobile, collaboration and analytics

technologies. How poised is your enterprise to

put these trends into an optimized context that

works to the benefit of the business?

CIO QuickPulse * IT and Business

How Are You Measuring the Success of Optimizing IT and Business Operations?

78%Reduced Costs

56%Improved Customer Service

53%Gains in Employee Productivity

For more information, visit www.sap.com/simplify-operations

Source: IDG Research, January 2012

Copyright © 2012 by SAP